TMI Blog2021 (1) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... of natural justice, that ensure transparency and fairness, in the decision making process Tribunal has merely recorded its conclusion and has not assigned any reasons in support of the conclusion. Thus, for the aforementioned reasons, the impugned order dated passed by the tribunal is hereby quashed. The substantial question of law is answered accordingly. Tribunal is directed to decide the claim of the assessee under Section 40(a)(ia) of the Act afresh on the basis of the material available on record and on the basis of the reasoning assigned by the AO as well as CIT(Appeals) and shall also advert to the issue whether the condition precedent for invocation of Section 40(a)(ia) of the Act have been fulfilled in the fact situation of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) read with Section 195 of the Act does not arise ignoring the contents of the agreement entered into by the assessee with STI coupled with other documentary evidence brought on record by the Assessing Authority and when assessee had failed to substantiate its claim that the said amount is paid towards reimbursement of expenses and when Commissioner of Income Tax (Appeals) rightly confirmed the said disallowance after appreciation of aforesaid materials? 3. Facts leading to filing of this appeal briefly stated are that assessee is engaged in the development, sales and service of software products. Under a scheme of arrangement approved by this court, the service business of the assessee's parent company i.e., Subex Technologies In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act made an addition of ₹ 62,49,85,348/-. The aforesaid order was upheld by the Commissioner of Income Tax (Appeals) vide order dated 25.02.2014. Thereupon the assessee filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as 'the tribunal' for short). The tribunal by an order dated 29.07.2016 inter alia held that income and expenses recorded in the books of Subex Technologies Inc (STI) between the period from 01.09.2007 to 31.03.2008 were recorded in the books of the assessee by way of journal entry and therefore, there was no need for deduction of tax at source under Section 195 of the Act and it was held that the authorities erred in disallowing the amount in question under Section 40(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the tribunal has failed to record any findings with regard to nature of services. Therefore, the matter deserves to be remitted to the tribunal as it is a final fact finding authority. 6. On the other hand, learned counsel for the assessee submitted that on 01.04.2009 Subex Limited entered into an agreement with Subex Technologies Inc (STI) and the aforesaid agreement was produced before the Assessing Authority as well as Commissioner of Income Tax (Appeals). It is further submitted that condition precedent for invoking Section 40(a)(ia) of the Act was not satisfied as the assessee was neither the person responsible for making payment nor had made payment. It is further submitted that the seller was responsible for making payment. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax (Appeals). It is well settled in law that even a quasi judicial authority is required to assign reasons in support of its order. 8. It has been held by the Supreme court in VICTORIA MEMORIAL HALL vs. HOWRAH GANATANTRIK NAGRIK , 2010 (3) SCC 732 , reasons were held to be the heartbeat of every conclusion, apart from being an essential feature of the principles of natural justice, that ensure transparency and fairness, in the decision making process. [ SEE: MAYA DEVI VS. RAJ KUMARI BATRA AND OTHERS , (2010) 9 SCC 486, SANT LAL GUPTA AND OTHERS VS. MODERN CO OPERATIVE GROUP HOUSING SOCIETY LIMITED AND OTHERS , (2010) 13 SCC 336, UNION OF INDIA AND ANOTHER VS. TALWINDER SINGH , (2012) 5 SCC 480, and UNION OF INDIA VS. RAVIN ..... X X X X Extracts X X X X X X X X Extracts X X X X
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